India: Carlsberg’s Indian business posts lower volume growth in Q1
Danish brewer Carlsberg's Indian business fell sharply in terms of volume growth at 7% due to higher base compared to about 30% a year ago. The high growth during Jan-March last year was on to a lower base when demand suffered due to highway ban. Net revenue, however, grew 16.6% during the quarter despite volatile market, the Economic Times reported on May 5.
"India has a volatile business, due to the differences per state. And what we see as well are some lower sales in some states in anticipation of dry days, due to the elections, and as well we have changed some prices in some states," Cees ’t Hart, global chief executive officer, Carlsberg said on an investors call. "March was a bit more soft. April is doing okay."
After a year of declining demand, beer sales in India grew 4.6% in 2018, helped by the fading impact of a highway ban, although sales have started to taper off this year due to an increase in taxation and liquor curbs during the general election.
Carlsberg has about 18% market share in India backed by Elephant and Tuborg in a market skewed towards strong beer. The world's third largest brewer also said it doesn't see major expansion plans for India in terms of new brewery addition. "We continue with our growth by first making sure that we have the number 1 and number 2 position in a state and then continue to invest in another state. The last state we did was Karnataka. We opened the brewery a half year ago and that's what we are now focusing on," Hart told analysts.
India is largely a whiskey and spirits dominated market and per capita consumption of beer in India is about 2 litres per person a year, which is little compared with the global average of about 30 litres. And strong beer segment accounts for about 80% of the market. In India, Tuborg accounts for more than two-thirds of the company's annual sales.
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